A subsidiary of the PAS-led Kelantan state government involved in the timber industry has returned a profit of RM4.09 million after four years of loss-making with state leaders attributing the success to economic reforms initiated.

State executive councillor Husam Musa told malaysiakini that KPK which underwent management changes last year, would now be a model company for the state's other subsidiaries in achieving their business targets.

"The Kelantan state government intends to inculcate a responsible corporate culture among its subsidiaries so that they become more professional in managing their affairs and increasing their income.

"KPK's success shows that it is not impossible. This is just the beginning," said Husam adding that KPK would be issuing a two-month bonus for its staff.

"I had explained to the staff that the management changes had to be done and with their cooperation, the company was able to make enough profit to issue a bonus for all staff," he said.

KPK's pre-tax RM4.09 million profit comes from a total income of RM28.8 million for the financial year ending December 2004. Apart from the local market, the company also exports sawn timber to Holland for distribution in Europe.

'Positive impact'

Meanwhile, a Kelantan politician who declined to be named said that KPK's strong performance had proven critics of the PAS-led state government wrong.

"There was resistance from the old guard when Husam started making changes. This also shows that (Kelantan) Mentri Besar Nik Abdul Aziz Nik Mat made the right choice in selecting the people to revive the state's economy," he said.

He expressed hope that KPK's financial success would put and end to what he said were baseless allegations aimed at Husam and his efforts in bringing about reform in Kelantan.

"He was accused of electing his crony, Ramli Musa to head the company. This is far from the truth. Ramli was made KPK captain because of his experience in the corporate sector, that's all," said the observer.

"And obviously the change of management in KPK has had a positive impact."

Ed's note: Kompleks Perkayuan Kelantan (KPK) Berhad has clarified in a statement that its subsidiary which turned in a profit after four years was KPK Sawmills Sdn Bhd. KPK Bhd itself has remained profitable over the past four years though its performance last yeat was the best to date.